In The Name Of God The Most Merciful, Most Compassionate

Sharia compliant interest free loans launched in Australia

by Mohammed Kandil

Filed under: Australia,News |


Jun 29 2011

Sydney based Islamic organization MuslimVillage Incorporated, has introduced interest free loans to assist low income earners purchase essential items, regardless of their race or religion. The initiative, in partnership with a Christian charity and supported by a major bank and the Australian government, is also fully Sharia compliant and a good example of how Sharia can work within a secular legal system to benefit society.

MuslimVillage Incorporated, the publishers of, launched the Qard Hassan No Interest Loan Scheme (NILS) NSW in late May. The scheme is a sustainable financial solution that reflects the Islamic teachings of ethical trading, no interest and the ethos of helping others without expecting anything in return.

Qard Hassan, which means “benevolent or good” loan in Arabic, is the result of a 18 month establishment process that has resulted in a partnership agreement with Good Shepherd Youth and Family Services to offer the scheme. Good Shepherd supervises and provide guidance to over 300 similar NILS programs established through out Australia.

The Qard Hassan NILS NSW program is one of the first to be run by a Muslim organisation. Two other Qard Hassan programs run by Islamic organisations have also been recently established in Victoria (Islamic Council of Victoria) and South Australia (Islamic Foundation Australia).

With $90,000 seed funding from the National Australia Bank and an establishment grant from the Australian Federal Government’s Department of Families, Housing, Community Services and Indigenous Affairs, Qard Hassan NILS intends to assist all low income earners, regardless of race or religion.

The sharia-compliant micro-finance product Qard Hassan NSW NILS provides applicants, with loans of up to $1,200 that can be used to purchase goods and service that are considered essential for day to day living.

The list of eligible items is extensive and includes items such as household appliances  – fridges, washing machines, stoves; furniture, computers, education costs, car purchase or repairs and health items such as wheelchairs, hearing aids and dental costs.

Hani Eljamal, the Manager of the Qard Hassan NILS NSW scheme explained how the program assists low income earners purchase items that many others may take for granted.

“For many people on low incomes, replacing a broken down fridge or washing machine is near impossible if one is living week to week and unable to save or access finance. Qard HAssan NILS enables applicants to acquire assets that they would otherwise be unable to afford” he said.

“The defining quality of NILS schemes is that they are a form of helping people in a dignified manner. They are really giving someone a hand up, rather than a hand out” said Eljamel.

Another important aspect of the scheme was that money was not given to the successful applicants of the program but rather paid directly to the supplier of a good or service. This guaranteed that the scheme operated to help those genuinely in need.

Eljamel further explained how the scheme was a good example of people working together for mutual benefit.

” All loans are expected to be paid over a 12-18 month period with repayments automatically deducted from the loan recipients Centerlink payments. These payments then come back to us to loan out to others in need, allowing the scheme to potentially assist hundreds of people over the coming years” he explained.

Eljamel was especially proud of the fact that the first loan approved was for a non Muslim student to purchase a laptop to assist with his studies.

Full details such as eligibility criteria and how to apply for Qard Hassan NILS can be found at their website or contacting 1300 964 292 (Australian residents only).

Video of Qard Hassan NILS NSW launch

(Apologies for low sound quality)

The RealDave
The RealDave 5pts

Rather than an example of "how Sharia can work within a secular legal system to benefit society" this model exemplifies a practice which offends neither religious nor secular proponents of equity. You can't recast a double negative as a positive. The subtle difference here is that the corollary is equally permissible in secular society, while punishable as a crime under Sharia. So no - they cannot coexist.

happyspace 5pts

Now all we need is decent interest free home loans... rather than so-called sharia compliant loans where you end up paying just as much, if not more, than you would with a regular mortgage.

cm786 5pts

MashaAllah all the best for this great initiative MV:)

Rahmat 5pts

Two thumbs up! Good initiative for the greater community.

Bashkim 5pts

Nice to hear,
Hope that you can bring the same in Europe.

Anon 5pts

A great example illustrating how when we put aside diferences and work together, we're able to accomplish something positive for a plethora of folks :)

Wendy Lewthwaite
Wendy Lewthwaite 5pts

This is nothing new. My cousin is head of a Catholic programe that does likewise & has for years.

Its funded by Aussie tax payers

Majid 5pts

Humdulilah for this initiative. Muslimvillage have done a great job, making NILS more accessible. The fact that it is 'nil interest', is fantastic not just for Muslims (riba), but because it will inshAllah also assist Non-Muslims in need - without expecting a profit in return. I pray that this program is successful and assists Australians in improving their lives.

Abu Aziz
Abu Aziz 5pts

I hope this is a real deal of free interent not a rip off. Many islamic interest free loan's here in australia are based with interest. no different then non-islamic loan's. and people just lach into it because it's a sharia loan's but it's not.

Taylan 5pts

I wish I had enough funds and was the one to set up an institution to provide non-interest loans for houses and cars because of the reward from Allah, Subhan'Allha!

UmAmr 5pts

Maybe they should think of a loan that can cover items like houses and cars without the interest. This will make life a lot easier for all of us whether Muslim or non-Muslim; on a low income or a high income. The cycle will never end if your paying rent, your always going to be one step behind (and having to move out every year or so.......which is very annoying).

Mariam 5pts

Inshallah Kheir! This will help me a lot!!!!

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